UnitedHealth Group Completes Acquisition of Sierra Health Services
Companies Receive Approval from U.S. Department of Justice; UnitedHealth Group Agrees to Divest Individual Medicare Advantage Plans in Clark and Nye Counties, Nevada
Combined Company Will Provide a Comprehensive Range of Affordable Products and Services to Health Care Consumers in the Southwest
Minneapolis and Las Vegas (Feb. 25, 2008) – UnitedHealth Group (NYSE:
UNH) and Sierra Health Services, Inc. (NYSE: SIE) today announced that they
completed their transaction effective as of the close of business today. Under
the merger agreement, Sierra stockholders receive $43.50 in cash for each share
of Sierra common stock, representing an equity value of approximately $2.6
billion.
The U.S. Department of Justice has provided approval of the acquisition. As a
condition of approval, UnitedHealth Group will divest its individual
SecureHorizons Medicare Advantage HMO plans in Clark and Nye Counties, which
represent approximately 25,000 members. UnitedHealth Group has reached an
agreement to transition these members to Humana Inc., subject to customary
closing conditions.
UnitedHealth Group and Humana have agreed to work together to ensure a seamless
transition of the individual SecureHorizons Medicare Advantage HMO plans in
Clark and Nye Counties and will notify affected members as details become
available. UnitedHealth Group emphasized that post-divestiture, these members
will continue to receive the benefits they currently have, and there will be no
interruption in these members’ health care coverage.
Group SecureHorizons Medicare Advantage plans offered to retirees through
commercial customers or contracts are currently excluded from the divestiture
and will continue to be operated by UnitedHealth Group. Sierra will retain its
Medicare Advantage HMO plans in Nevada which are offered under the Senior
Dimensions brand.
Ken Burdick, CEO of UnitedHealthcare, said, “We look forward to building on our
shared heritage of providing consumers access to affordable, high-quality health
care. Our goal is to offer Nevadans the most comprehensive range of
cost-effective, innovative health care products and services in the Southwest.”
Jonathon Bunker, president and COO of Sierra, said, “Joining our two
organizations will be good for Nevada’s health care consumers, good for the many
dedicated professionals who provide their care and good for the employees of
Sierra. With greater resources and advanced technology, we can now build upon
our legacy by providing more options for our members and expanded access to the
largest national network of hospitals, physicians and other care providers.”
In connection with the transaction, UnitedHealth Group and Sierra also reached
an agreement with Nevada Attorney General Catherine Cortez Masto that is
consistent with the terms of the Department of Justice consent decree. As part
of that agreement, and consistent with UnitedHealth Group’s longstanding
commitment of philanthropic initiatives to improve and expand health care access
for underserved populations, UnitedHealth Group will make $15 million in
charitable contributions over the next five years to benefit health care
consumers and programs in the State of Nevada.
Today’s news does not impact UnitedHealth Group’s full year 2008 financial
outlook, which previously included projected results for Sierra. UnitedHealth
Group continues to project full year revenue of approximately $83 billion and
earnings in the range of $3.95 - $4.00 per share.
About UnitedHealth Group
UnitedHealth Group is a diversified health and well-being company dedicated to
making health care work better. Headquartered in Minneapolis, Minn.,
UnitedHealth Group offers a broad spectrum of products and services through
seven operating businesses: UnitedHealthcare, Ovations, AmeriChoice, Uniprise,
OptumHealth, Ingenix, and Prescription Solutions. Through its family of
businesses, UnitedHealth Group serves approximately 70 million individuals
nationwide.
About Sierra Health Services, Inc.
Sierra Health Services, Inc., based in Las Vegas, is a diversified healthcare
services company that operates health maintenance organizations, indemnity
insurers, preferred provider organizations, prescription drug plans and a
multi-specialty medical group. Sierra’s subsidiaries serve over
860,000 people through health benefit plans for employers, government programs
and individuals. For more information, visit Sierra’s website at
www.sierrahealth.com.
Forward-Looking Statements
This press release may contain statements, estimates, projections, guidance or
outlook that constitute “forward-looking” statements as defined under U.S.
federal securities laws. Generally the words “believe,” “expect,” “intend,”
“estimate,” “anticipate,” “plan,” “project,” “will” and similar expressions,
identify forward-looking statements, which generally are not historical in
nature. These statements may contain information about financial prospects,
economic conditions, trends and uncertainties. We caution that actual results
could differ materially from those that management expects, depending on the
outcome of certain factors. These forward-looking statements involve risks and
uncertainties that may cause UnitedHealth Group’s actual results to differ
materially from the results discussed in the forward-looking statements. Some
factors that could cause results to differ materially from the forward-looking
statements include: the potential consequences of the findings announced on
October 15, 2006 of the investigation by an Independent Committee of directors
of our historical stock option practices; the consequences of the restatement of
our previous financial statements, related governmental reviews, including a
formal investigation by the Securities and Exchange Commission, and review by
the Internal Revenue Service, U.S. Congressional committees, U.S. Attorney for
the Southern District of New York and Minnesota Attorney General, a related
review by the Special Litigation Committee of the Company, and related
shareholder derivative actions, including whether court approval of the
settlement agreements between the Company and certain named defendants and the
dismissal of the derivative claims against all named defendants is obtained,
shareholder demands and purported securities and Employee Retirement Income
Security Act class actions, the resolution of matters currently subject to an
injunction issued by the United States District Court for the District of
Minnesota, a purported notice of acceleration with respect to certain of the
Company’s debt securities based upon an alleged event of default under the
indenture governing such securities, and recent management and director changes,
and the potential impact of each of these matters on our business, credit
ratings and debt; increases in health care costs that are higher than we
anticipated in establishing our premium rates, including increased consumption
of or costs of medical services; heightened competition as a result of new
entrants into our market, and consolidation of health care companies and
suppliers; events that may negatively affect our contract with AARP;
uncertainties regarding changes in Medicare, including coordination of
information systems and accuracy of certain assumptions; funding risks with
respect to revenues received from Medicare and Medicaid programs; failure to
achieve business growth targets, including membership and enrollment; increases
in costs and other liabilities associated with increased litigation, legislative
activity and government regulation and review of our industry; our ability to
execute contracts on competitive terms with physicians, hospitals and other
service providers; regulatory and other risks associated with the pharmacy
benefits management industry; failure to maintain effective and efficient
information systems, which could result in the loss of existing customers,
difficulties in attracting new customers, difficulties in determining medical
costs estimates and appropriate pricing, customer and physician and health care
provider disputes, regulatory violations, increases in operating costs, or other
adverse consequences; possible impairment of the value of our intangible assets
if future results do not adequately support goodwill and intangible assets
recorded for businesses that we acquire; potential noncompliance by our business
associates with patient privacy data; misappropriation of our proprietary
technology; failure to complete or receive anticipated benefits of acquisitions;
the potential consequences of the New York Attorney General’s investigation into
our provider reimbursement practices; and the outcome of the divestiture of our
individual SecureHorizons Medicare Advantage HMO plans in Clark and Nye Counties
(Nevada) and the integration of the operations of the Company and Sierra Health
Services, Inc. after the divestiture.
This list of important factors is not intended to be exhaustive. A further list
and description of some of these risks and uncertainties can be found in our
reports filed with the Securities and Exchange Commission from time to time,
including annual reports on Form 10-K, quarterly reports on Form 10-Q and
current reports on Form 8-K. Any or all forward-looking statements we make may
turn out to be wrong. You should not place undue reliance on forward-looking
statements, which speak only as of the date they are made. Except to the extent
otherwise required by federal securities laws, we do not undertake to publicly
update or revise any forward-looking statements.
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